How to Safely Navigate Through Crowded ETF Waters

by David Fry

I once interviewed a successful exchange-traded fund (ETF) sponsor and had the temerity to offer some suggestions where some ETFs were needed.

The response from this person was: “Look, we’re not interested in filling needs as much as we are in building a business.” This made an important point: Investors must align their investments to match their needs versus the business interests of sponsors.

The market for exchange-traded funds has never been more robust and expansionary. The most prominent activity for sponsors is similar to a game of Battleship in which the winner fills all the slots before the next guy. Why? Because the “first mover advantage” to a sector and index cements their brand as “the go-to shop.”

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David Fry is founder & publisher of ETF Digest and author of “Create Your Own ETF Hedge Fund: A Do-It-Yourself ETF Strategy for Private Wealth Management” (Wiley Finance, 2008).


Dan from Florida posted over 3 years ago:

I am a new member, I have seen very little discussion concerning the NUVEEN ETFs. Is there any past or pressent discussinos about this group of funds?

Patt from Maryland posted over 3 years ago:

I am an older person with investments in Vanguard and Fidelity. My effort is to transfer some of these to ETFs.I have yet
to find which ETFs will fulfill my need.

Curt from Florida posted over 3 years ago:

Why would I comment on general data with little specificality!

Jerald from Virginia posted over 2 years ago:

Good question, Curt. Why indeed comment at all?

Pat. Vanguard has a great selection of ETF's you can buy through their brokerage house at no commission. I use them to support the Wellington (balanced) and the Precious Metals managed mutual funds. They include; Heath Care ETF, Emerging Markets, EuroPacific, domestic and world REITs, Energy and Dividend Appreciation.
I do feel a downturn in all these holdings is more than possible but decided against using a ETF to short. We have no choice but to face the music. I do hold a few individual stocks, but less than 10 percent of portfolio. I believe ETF and mutual funds are the way to go for most of us.

Wayne Barbarick from California posted about 1 year ago:

Good article on ETF's. I am invested in gold and silver ETF's(about 15% of my portfolio) and they follow the gold & silver market prices very closly. My investment has grown by 75% over 3 years. I use these ETF's as a hedge against inflation and the Federal Reserve's printing of money.

Charles from California posted about 1 year ago:

Generalities are difficult to comment upon specifically.

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